Diversified credit: shortening the time to endgame?
We believe diversified credit (or multistrategy credit) can be much more than just a growth asset class. It could help pension schemes to meet their endgame sooner whilst also providing cashflows.
We believe that diversified credit is one of the important options that schemes can look to consider to try to reduce the time to their chosen endgame, offering the potential opportunity for generating return, providing stable cashflows, and integrating ESG. We advocate that it is considered as part of a holistic approach, potentially working alongside other portfolio elements such as, private credit markets, investment grade credit and other cashflow distributing assets to enable schemes to meet their requirements.
In this article we explore another use for diversified credit strategies: how allocating to diversified credit can help schemes manage their cashflow requirements whilst also shortening their timeframe for reaching their chosen endgame. We also touch upon the increased importance of integrating ESG (environmental, social and governance) into these strategies, not only to invest for a better future, but also to help drive investment value in this rapidly changing environment.